David Lichtenstein: Construction Trends Point to Housing Rebound

PHILADELPHIA, PA, October 25, 2012

As many industries are starting to show signs of recovery from the impact of the recent recession, some experts believe the housing market is also expected to make a turnaround. According to a recent article from the Associated Press, "U.S. builders spent more to construct homes in August, further evidence of a housing rebound. Still, the increase [could not] offset cuts in public projects and commercial real estate." As CEO of the Lightstone Group--one of the largest and most successful privately held real estate companies in the United States--David Lichtenstein responds to these trends with optimism.

Despite the 0.7 percent dip in overall construction spending in August from July, the article reveals that individual construction markets have been making a steady recovery. With residential project spending rising 0.9 percent in August, residential spending rose nearly 18 percent from the previous year, with a seasonally adjusted annual rate of $273.5 billion. The article adds, "Spending on single-family homes increased in August for the fifth straight month, while apartment construction spending rose for the 10th month in a row."

As a real estate professional who has built his company by developing a diverse portfolio of properties, David Lichtenstein understands the true value behind residential construction. David Lichtenstein explains, "Commercial property development is great, as it indicates a growth in the economy; however, it can only be looked at via a wider, corporate perspective. An increase in residential construction spending is not only beneficial to the recovery of the construction industry, but it also indicates that consumers are becoming more confident and willing to pursue new real estate purchases. This consumer confidence could possibly translate into long-term growth for the economy."

However, David Lichtenstein adds that before such growth can occur, changes need to be made in the financial structuring of mortgage costs. With low employment rates and sluggish wage growth, it has become apparent that many citizens are still apprehensive when it comes to large purchases. The article suggests a possible resolution and states, "The Federal Reserve is hoping to drive mortgage rates lower to make home buying more affordable, and therefore help the economy grow. Earlier this month, it said it would spend $40 billion a month to buy mortgage-backed securities until the job market shows substantial improvement." Although increased construction spending is a great indicator of housing market recovery, David Lichtenstein concludes that this is one economic process that many Americans will have to wait for to be sure of positive results.

ABOUT:

David Lichtenstein is the chairman and CEO of the Lightstone Group, one of the most widespread and successful privately held real estate companies in America. Having founded the Lightstone Group in 1988, David Lichtenstein has become a finessed real estate professional throughout the years. He offers years of experience and immense expertise in the areas of real estate acquisition and development. With proficiency in investment strategies, portfolio development and financial planning, Lichtenstein has effectively served as a pioneer in the real estate industry. In addition to these professional endeavors, Lichtenstein is an investor in biotechnology, as well as an advocate on behalf of various medical schools and colleges.